Intellectual Property Impotent to Transitional Economics

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Intellectual property is nothing but an asset which aims to inventive and creative work which gives rights to stop or seal the unauthoriesed work. the international exploitation of ip is origin for trade and FDI and also technology licensing across the world. to protect IP there is Intellectual property rights which differs from country to country or by it region. again to have control on all this things one foundation was formed that’s the World Trade Organization.

The New Global System of IPRs

weaker side of the international system became clear as the forces of globalization expanded. as the market grows within each country over the period of time, there is a need generated for the new standards of protection as technology and marketing strategies are change. These decisions were taken because of both external pressure and a growing perception, however valid, that strong IPRs are important in attracting investment and technology.

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The TRIPS Agreement

It is useful to list those provisions that will require significant legal and institutional changes The standards discussed are minimum requirements in all WTO members without reservations, but nothing in the Agreement precludes countries from adopting stronger procedures. An important general obligation is the introduction of MFN treatment into IPRs. , WTO members no longer can exclude any area of technology, such as pharmaceutical products, from patent eligibility and the burden of proof in process infringement cases is placed on the accused. Patent protection must extend for at least 20 years from the application filing date. Patent holders cannot be obliged to work their 13 patents with local production. . Original industrial designs must be protected for a minimum of ten years. Countries must recognise, in their laws, protection for well-known trademarks and protection is extended to service marks and collective marks.

These registration of the patents may be cancelled for no use of it under strong and limited circumstances. compulsory licenses of trademarks are strictly prohibited.WTO members must support or protect geographical indications of origin and prevent from misleading people from origin of goods.

Copyright holders are given rental in order to earn the commercial rental of their works. Computer programs and databases must be protected (at a minimum) as literary devices, meaning that they are given copyright protection for at least 50 years. In most countries this obligation means that literal copying must be ended, while the scope for fair-use decompilation remains open to discussion.

Countries must develop effective enforcement measures, including border controls, to prevent international and domestic transactions in counterfeit goods. Such measures must include the potential for paying damages to rights-holders and for criminal sanctions against willful counterfeiting and copying. Developing countries and countries in transition must meet the detailed obligations within five years (that is, by January 1, 2000) and least-developed countries must meet them within eleven years (by January 1, 2006). The latter countries may, upon appeal to the TRIPS Council, receive extensions for an 15 unspecified period, suggesting that they have been given an opt-out procedure.

Countries are free to accelerate their adherence to TRIPS. Disputes in intellectual property will be subject to the integrated dispute settlement mechanism agreed in the WTO. However, there is a five-year moratorium on the use of dispute settlement against indirect violations of TRIPS, allowing nations to select implementation strategies without interference through this route. In systemic terms, one of the primary benefits of TRIPS in establishing a broad set of multilateral disciplines over IPRs is that it will move future conflicts into an established forum for settling disputes. These conflicts likely will expand due to increasing global economic integration and growing importance of IP-sensitive goods and services in international commerce.

Economic Implications

The TRIPS Agreement ushers in a new global framework for IPRs. It markedly strengthens minimum standards for protection, moving the system closer to harmonisation, and tilts the balance of economic rewards toward innovative interests and away from imitation and copying. It also expands the choice sets available for high-technology firms in deciding how best to service international markets – through inter-firm or intra-firm trade, investment, joint ventures, licensing, patent pooling or cross-licensing agreements with competing foreign firms, and pricing to market. Little is known about how this change will influence resource flows and the distribution of benefits and costs across countries and over time. However, it is useful to characterize briefly the evidence to date. Consider first a functional breakdown.

Transitional Economics are also the important factors because they stand to benefit more from higher levels of IPR protection than other developing countries. these countries have highly educated workforce which indicate that they have a greater ability to take advantage of higher levels of IPR protection, these capable of engaging the results which may leads to the patents and may look forward to attracting the multinational companies to engage for the patents for Foreign direct investments.

One approach to assessing the value of IPR and the innovation they embody is to assess the contribution such rights make to productivity. Productivity is perhaps the single most important statistic used by analysts interested in seeing how firms and countries are performing. Recently, a small number of papers have attempted to assess this contribution at the firm level. Organization for economic Development (OECD) Countries that boosted the levels of research and development had very strong effects of productivity growth.

They calculated measures of TFP for each of the countries in their sample, and then regressed cumulative domestic research and development expenditure and a weighted measure of foreign research and development expenditure on TFP. Patents are included as a proxy for knowledge in an econometric specification of firms’ production functions; the dependent variable in these regressions is based on firm’s real sales, which the author’s take as a measure of productivity.

These authors do not use actual renewals data, unlike the costs approach to patent value, to construct actual patent stocks. Rather they investigate alternative specifications of calculated patent stocks to reveal the timing and impact of leads and lags in their impact on productivity, using a variety of assumed depreciation rates. Clearly citation weights pose further problems in that the importance of any patent is revealed slowly throughout its duration and some citations may be as yet to come, necessitating either estimation of unobserved future citations or the adoption of a fixed time cut-off. patent stocks estimated using a fixed depreciation rate, and two variants of citation-weighted patent stocks, using imputation of future citations for one measure and a five year cut-off for the other.

Firms registering trademarks and patents, but also examine the size and duration of benefits to IP protection for the firms in their sample. This question is of interest since it would be useful to know if the economic gains to IP protection correspond to the length of protection enshrined in statute. the absolute amount of R&D, or the total amount of IP assets, is important for firm performance. They compare this idea of knowledge as a non-rival good with a contrasting hypothesis of knowledge as a depletable good, whereby the intensity of R&D and IP relative to firm size becomes important as each process or product only affects part of the range of the firm’s output in a multi-product firm. The empirical analysis reveals that firms that register trademarks and patents, and who do R&D (for those firms who report R&D separately in their accounts) are more productive.

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